A recent viral post on X sparked debate over insurance companies cutting costs by switching to generic drugs.

These are medicines that are considered chemically the same as their brand-name counterparts but are more affordable and may look slightly different.

As of February 23, the post has garnered over 567,000 views and 4,200 retweets, fueling widespread criticism on the medical industry. Many accused insurance companies of prioritizing profits over patient care.

Some even questioned whether policyholders would see lower premiums now that insurers are opting for cheaper alternatives.

While some of these accusations are true, it needs more context to help readers stay better informed.

Are generic drugs actually less effective than their brand-name counterparts?

To give you a better idea, let’s say you’ve been using Panadol as a painkiller for your whole life. It’s a famous brand, and you know it works.

But one day, you see a cheaper alternative called PainAway at the pharmacy.

PainAway says it works the same as Panadol because it has the same active ingredient (Paracetamol).

But… how do you know it really works the same? 🤔

That’s where the regulators come in and do some tests. 🔍

Manufacturers of generic drugs are required to ensure that the drug is identical to its brand-name counterparts in:

• Dosage form

• Safety

• Strength

• Route of administration

• Quality

• Performance characteristics

• Intended use.

To do so, most generic drugs have to undergo a “Bioequivalence (BE)” test. This is really just a fancy word to determine its similarity to the Brand-Name Drugs.

The test observes a few parameters, such as:

• Max. concentration of a drug in your blood (Cmax)

• Drug exposure over time (AUC)

For a generic drug to be “bioequivalent”, the parameters (Cmax, AUC, etc.) have to fall between 80-125% of the branded drug.

In other words, a cheaper painkiller brand (PainAway) has to deliver 80-125% similar results as compared to the original brand (Panadol).

But there’s more.

90% of the values also have to be within this range, which means that scientists have to be 90% certain that PainAway’s parameters are within 80-125% of Panadol’s.

Because of this strict rule, the generic drug (PainAway) can’t really be much different from Panadol (usually within 10%).

If it’s more than 20% different, it’s almost impossible to pass. This is proven by multiple reputable research papers.

So to the answer the question: are generic drugs less effective than brand-name drugs?

Not really. 

They have the same risks and benefits as the brand-name medicines.

Of course, I can’t end this article without mentioning the elephant in the room: insurance companies.

With them opting for cheaper alternatives, you might ask when will they be reducing their prices.

The answer is never. 🥲

Remember, these are for-profit companies. They’re selling you insurance NOT because it’s a public service, but to generate profit for their shareholders.

That said, switching to generic drugs is one of their cost-cutting measures, which I hope will help to slow down the pace of price increases. 🤞

So what can I do about this?

Understand your insurance plans and only buy what’s important to you.

According to RinggitPlus founder Hann Liew, many plans are bundled with investment objectives, which increase your monthly payments.

Without these, you can still get premium coverage at only RM100-150/mo.

Here are a few options you can consider:

i) Decent coverage: Etiqa OneMedical https://edp.etiqa.com.my/life/onemedical/takaful/plan

• ~RM80-90 per month for a 28 y/o

• RM150,000 annual coverage

• RM360 for room and board

• Cashless admission

• No deductibles

ii) Basic coverage: FWD i-Med https://www.fwd.com.my/medical-insurance-takaful/i-med/#

• ~RM60-70 per month for a 28 y/o

• RM90,000 annual coverage

• RM250 room and board

• Cashless admission

• No deductibles

iii) Great coverage: AXA Affin SmartCare Optimum Plus https://fiselect.my/pdf/medical/PDS_SmartCare_Optimum_Plus_01072021.pdf

• ~RM80-90 per month for a 30 y/o

• RM1.1 million annual coverage

• RM180 room and board

• Cashless admission

• No deductibles

FYI, we’re NOT SPONSORED by any of the brands above. ^

How much are you currently paying for insurance?

Have you experienced any price increases?

Let us know in the comments below. 👇

Disclaimer: The information contained in this article is for informational and educational purposes only. Nothing herein shall be construed to be financial, legal, or tax advice.

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